Analysis | Credit tight, deals dwindle

Private equity deals flourished during the days of easy credit, as firms flush with cash snapped up companies. Now, with credit tight and a recession underfoot, the private equity market is at a standstill.

"What you're seeing is a lot less deals getting done today," says Neal Aronson, a managing partner at Atlanta-based Roark Capital Group, a private equity firm that has purchased well-known companies such as Cinnabon and Moe's Southwest Grill in the past few years.

A turnaround could take at least three years or more because of tight credit, Aronson says.

But the success of private equity firms matters to individual investors because large pension funds and institutional investors often invest with such groups.

Aronson says a healthy private equity market is also essential for a functioning economy.

"When the debt markets are in the doldrums and the equity markets are in the doldrums, companies cut back rather than investing in their business," he said.